Amazon.com may look like the biggest short in the history of Earth as the cloud story fizzles, but don't bet against it in the long run.

NEW YORK (TheStreet) -- We all remember the booms that bust. The housing bust. The dot-bomb. They mark the end of an economic cycle and the start of hard times for all.

But most booms just fizzle. In technology, new concepts get absorbed into the mainstream and the leaders of the bleeding edge just fall to Earth. Silicon Graphics was a big name during the 1980s but fell to its demise in the 1990s, because change is always a moving target.

So it is with cloud. Cloud is a big change.

Virtualization frees software from the bounds of its operating system. Distributed computing lets a single Web site run across the entire data center. It opens the way to careful analysis of huge data sets that once took years to plow through. It turns commodity hardware and open-source software into the most powerful systems the world has ever known.

But as 2012 has gone on, many cloud leaders have slowly come to Earth. VMWare(NYSE:VMW) is still growing and still has margins approaching 25%, but its shares are up just 10% this year, and its price-to-earnings ratio has fallen to "only" 51.

EMC(NYSE:EMC), which owns 80% of VMWare, is also well off its March highs and trades at a P/E of 22.

The same is true across the space. It's not a crash, just a gradual falling to Earth. Rackspace Hosting(NYSE:RAX) has barely budged this year, and its P/E has fallen to 73. Google(NYSE:GOOG) is still Google, but it's down 10% on the year, and its P/E is down to 17.6 from 22.

But one cloud stock has stubbornly resisted gravity: Amazon.com(NYSE:AMZN). Its P/E is an astronomical 184, and it's up 30% so far this year. Its margins remain wafer-thin, with earnings of $130 million on sales of $13.185 billion for the quarter ending in March.

Why?

The most obvious answer is top-line growth. Annual sales have doubled from $24 billion to $48 billion in two years. Dominance in the e-tailing niche is something folks think it's worth paying for, even if the percentage of sales hitting the net income line is one-third that of WalMart(NYSE:WMT).

But the real answer is cloud dominance. Despite big efforts by companies such as Google, Microsoft(NYSE:MSFT) and Rackspace Hosting, Amazon practically defines the public cloud. The Amazon Web Services (AWS) Application Program Interface (API) is both proprietary and an industry standard.

And the company continues to cut its prices to maintain that dominant market share. Its latest such cut, announced just last week, means a developer can now get technical support on AWS for just $49/month. There are standard Web hosting plans that cost more.

These price cuts are becoming a habit and they're often highly strategic.

Amazon's March cut dropped prices by more than one-third when you reserved "instances" on its system, but just 10% when you dropped in, "on-demand." That helps with planning, it keeps revenue flowing, it maintains market share. It's smart.

Still. A P/E of 186 in a market that looks wobbly, when every company out there is gunning for you, and where your basic business has a profit margin that would make Mr. Costco blush. It sounds like a short here is the biggest no-brainer in the history of Earth.

Good luck with that. I've got my 20 shares, and I'm staying. If your short is right, I'm buying more when you cash out. The space may be fizzling, the market may be wobbly, the margins anorexic, but Amazon.com will be worth more in five years, in 10 years and in 20. If you're an investor, that's what you're looking for.

At the time of publication, Blankenhorn held shares of AMZN, GOOG and MSFT.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.